Metal Stocks Outlook
for the week – 06 to 09.09.2016
Minor correction
seen; SAIL, Jindal Steel eyed
A minor correction may be on the cards for stocks of major
metal and mining companies in the
coming week, after stocks rebounded in the last few trading
sessions. However, overall, the sector
looks positive. At the fundamental level, an increase in
international prices of iron ore, steel and zinc
is somewhere reflected in these stocks. Market participants
would keep a close watch on shares of
Steel Authority of India and Jindal Steel and Power as the
companies will detail their Apr-Jun
earnings on Sep 8. Weighed by plummeting realisations,
higher depreciation and interest costs, SAIL
is seen posting a net loss of 11.52 bln rupees for the
quarter ended June.
The company's net sales are expected to rise 7% on year to
100.33 bln rupees in Apr-Jun. Jindal
Steel is seen reporting consolidated net loss of 4.88 bln
rupees for Apr-Jun due to higher depreciation
and interest cost. The steel-to-power company's consolidated
net sales are expected at 46.81 bln
rupees. Stocks of Tata Steel, SAIL and Jindal Steel may
outperform the Nifty Metal index in the shortrun. Tata Steel looks very positive despite some correction next
week. A 30% upside is seen (for
SAIL's shares) in the next quarter.